Tuesday, October 7, 2008

Tuesday 7 October 2008 Updates

Say it with a sting.....

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Tuesday, October 7, 2008Surge in SA's army sales to US

CLIVE RUBIN - Oct 07 2008 06:00

South Africa sold 427 armoured combat vehicles to the United States army last year, presumably for use in US wars in Iraq and Afghanistan, according to information supplied by the South African government to the United Nations.

A further 30 mine-resistant vehicles were exported to Iraq for use by private contractors or the revived Iraqi national army. This is the single largest consignment of South African weapons exports to the US intended for combat use.

The sales are in the 2007 South African National Conventional Arms Control Committee (NCACC) report to the UN, but have not been reported by the NCACC to Parliament as required by legislation.

The committee, set up to ensure transparency in arms exports, must report annually to Parliament. But, according to deputy defence minister Fezile Bhengu, this has never happened.

The UN figures suggest South Africa has become a leading foreign supplier of mechanised infantry vehicles to the US military.

South African exports account for nearly 50% of vehicles purchased in that category in the year reported.

Of the 427 armoured vehicles, 424 are RG31s manufactured by the Benoni-based BAE Land Systems, a subsidiary of the controversy-plagued British arms conglomerate BAE Systems.

However, this tally probably exceeds the annual output of the East Rand factory, which is known to have a production capacity of between 12 and 20 vehicles a month.

Not included in the UN figures are vehicles assembled by sub-contractors from existing reserves or which have been imported, re-tooled and refurbished.

In addition 51 armoured personnel carriers (APCs) were supplied to Saudi Arabia and the United Arab Emirates, key US allies and suppliers of crude oil to South Africa, in 2007.

It can be expected that follow-up contracts for maintenance, repair and replacement of vehicles lost in combat will continue to keep the BAE factory and sub-contractors busy.

The report also reveals gaps in the information provided by South Africa on its arms exports.

Although seven categories of weapons can be disclosed to the UN, only APCs were declared. However, Indonesia's 2007 declaration to the UN disclosed that among the nearly 3 000 small arms it imported, 210 5,56mm-automatic rifles came from South Africa.

Indonesia also purchased eight South African-manufactured recoilless anti-tank guns, marketed by Denel as "anti-material", and four 20mm canons.

In South Africa there is a shift from assembling fighting vehicles to more valuable and sophisticated military technologies.

Wireless communication companies Omnipless and Cobham, contractors to the US defence department market, assemble and produce equipment to help reduce friendly-fire incidents.

Included in their technologies are "international friend or foe" (IFF) electronics for F-16 and F-18 jet fighters and new-generation mine detection and detonation equipment attached to infantry or their APCs.

These products also do not feature in the NCACC's UN report, which provides for the inclusion of non-lethal military exports.

Rheinmetall of Germany, which has bought into state arms manufacturer Denel, can now participate in contracts to supply Nato with standard small arms and artillery munitions.

However, South Africa made no disclosure of small or large-calibre ammunition exports last year.

Parliament appears to be pushing for greater transparency through an amendment to the National Conventional Arms Control Act.

This would oblige NCACC and its secretariat, the directorate of conventional arms control, to report all sales, exports and imports and their value on a quarterly basis to Parliament.

However, the Bill provides only for Parliament to review -- not reject -- export permits, as it will receive data only for the preceding quarter.

In line with industry's wishes it also provides for various exemptions, most notably for repair and testing.

With a staff of just 16, the directorate admits it is struggling to perform reporting duties and has been unable to enforce regulations promulgated last year under legislation prohibiting South African-based mercenary activity in conflict areas.

M & G

Comments by Sonny

No wonder we were so good in our "Border Wars" Posted by Sonny Cox at 10:47 AM 0 comments Links to this post Labels: S A Hardware. "We're spying on the Publice-not criminals ?

'We're spying on the public'New minister set to stop illicit surveillance

October 06, 2008 Edition 2

BONGANI MTHEMBU

The newly appointed Minister of Intelligence, Dr Siyabonga Cwele, admits that unauthorised and unlawful spying on civilians is being conducted.

In an interview at the weekend, Cwele, who replaced Ronnie Kasrils two weeks ago, said he was unhappy with the manner in which the National Intelligence Agency had been operating in the past few years.

He had told NIA bosses just after his appointment that he would not tolerate the abuse of resources where people were being spied on in pursuit of agendas.

"NIA members have invaded people's privacy by conducting unnecessary and illegal surveillance, including unauthorised tapping of phones.

"It is true that their work involves spying, but it does not mean that they must not respect people.

"Authorised invasions must be done in a limited way and there must be strong reasons for it to be done," he said.

Unauthorised surveillance by the spy agency emerged in 2005, when former ANC National Executive Committee member Saki Macozoma, a prominent businessman, exposed NIA operatives spying illegally on him and his family.

He lodged a complaint with Kasrils.

The revelations led to the suspension of NIA director-general Billy Masetlha and two of his deputies, operations chief Gibson Njenje and counter-intelligence chief Bob Mhlanga. Masetlha was subsequently fired.

Cwele, who cut his political teeth in the South Coast of KwaZulu-Natal, chaired Parliament's intelligence committee before he was appointed to his new position.

He said yesterday that strict measures to prevent unnecessary spying were important to protect human rights and the upholding of the law .

Another mammoth task Cwele is facing is to bust drug trafficking and other smuggling.

"The issue of drugs is very serious and we have to deal with it. Drugs are brought into this country in large amounts and are being sold to our youth.

"We have to do something because our future leaders are being destroyed by drugs," he said.

Cwele believes that his department and the Department of Safety and Security should work together to confront organised crime.

The new Minister of Safety and Security, Nathi Mthethwa, has promised strict measures to deal with organised crime.

"I believe that our department should play a leading role in dealing with organised crime," Cwele said.

"South Africa has a large number of crime syndicates. We need to disturb the criminals' methods by infiltrating their nests,"

He said he would like to see his department playing a leading role in the security of big events, such as the World Cup.

"We want to have a secure 2010. We want to make sure that whoever comes here during the event is safe and the whole event is protected."

Related article

BEFORE his appointment to the cabinet, Dr. Cwele served as Chairperson of the ANC’s Lower South Coast Region for more than ten years. He has been a member of Parliament since 1994, and is now the new Minister of Intelligence. He is the former Chairman of the Parliamentary Standing Committee on Intelligence, and is known in Parliamentary circles for his hard work. Reports from Parliament say that Dr. Cwele was one of a few ANC MP’s who stood up to ex-president Mbeki’s strong executive, and he is said to have a good grasp of the intelligence system. He is well respected by his Parliamentary colleagues. Here on the South Coast his appointment was well received by the ANC’s South Coast region and other members of the community. The Regional Secretary of the region, Mzwandile Mkhwanazi, said besides being happy about the appointment of Dr. Cwele, they were also delighted that another Hibiscus Coaster, Ms. Nozizwe Madlala-Routledge, had been promoted to Deputy Speaker of Parliament. She was fired as Deputy Minister of Health by President Mbeki more than a year ago after serious differences of opinion between her and ex-Health Minister Manto Tshabalala-Msimang. “We are more than happy about the appointment of two hardworking members of the ANC. Their efforts and dedication have at last been recognised”, he said. “Not only the ANC South Coast region but the entire UGU is happy as they are representatives of the district.” Deputy Regional ANC Chairman Ravi Pillay said Dr. Cwele’s appointment was very deserving, and the people of the UGU District should feel very proud indeed.

Statement by Deputy ANC Regional Chairperson Ravi Pillay

“I HAVE known and worked very closely with Dr Cwele for the past 20 years. He was the first black African medical doctor in the district and ran a thriving medical practice before obeying the call to public service. He was active in student politics and continued his activism after qualifying as a medical doctor. He has led the ANC in this region since the unbanning, through the turbulent violence of the early 1990’s and a long period of steady, consistent and qualitative political growth to the point where the ANC is the indisputably dominant political force in the region. His appointment is just recognition of his hard work and very sharp strategic and tactical analytical abilities . He led from the front and inspired a generation of ANC activists to persevere and become respected ANC cadres and leaders in their own right. He combined theory and practice. It was not surprising to see him command great respect at provincial and national levels culminating in this new appointment. A committed nonracialist, activist for social justice and humanist, Dr Siyabonga Cwele has endeared himself to all who have engaged him. His first priority was to unite our people as a whole and this continues to be a driving principle. He never forgets his humble roots in rural Nqabeni near Harding , where his elderly mother still resides. Comrade Siyabonga has done us all proud. We wish him well and assure him of our continued and fullest support.” Just before going to press, the South Coast Fever received a letter to the editor from Cllr. Pillay, which was too late for publication on the letters page: In recent weeks our country has gone through watershed changes which have led to some of our compatriots being uneasy or uncertain. There is no need for such discomfort. Indeed the changes that have occurred and the manner in which they did, are very important precedents for the future. In my view, they further consolidate and deepen our democracy. As respected analyst Stephen Friedman said, perhaps the problem is that we have not internalised our democracy with conviction and therefore react in the manner we do. It bears repeating that Margaret Thatcher was effectively recalled by the Conservative Party, as was Tony Blair by the Labour Party. It is not surprising therefore that the reaction of the European Union was to congratulate South Africa and comment on the political maturity displayed. These political changes did not even make front page news in the major international centres of influence. There was clear and scrupulous compliance with all constitutional requirements and a very professional implementation of the political decisions taken. The short lived turbulence caused by the “resignations” of Ministers was not due, in my view, to any inadequacy in the implementation plan. There were those who chose to react as they did. Even then one can only have praise for the manner and dignity of President Mbeki’s resignation. Again important precedents have been set. There has been legitimate debate about the political correctness of the recall by the ANC of President Mbeki. Clearly after lengthy debate the majority view prevailed to the point of consensus within the National Executive Committee. A political judgement was made that on balance this was the correct thing to do. I agree with this decision because clearly too much energy and focus was on the perceived contestations rather than our well known national strategic objectives. It also in many ways brings forward the transition and settling in period which would have to occur any way after the election. The Nicholson judgement was clearly not the sole reason for the recall, perhaps the final one. There have been several authoritative comments on the importance of this judgement not only for the many important constitutional issues that it ventilates, but also for the compelling demonstration that the sword of justice cuts both ways. The judgement has been taken on appeal. I must confess that what I had thought were my long dead scholarly instincts have been revitalised by the quite fascinating and varied legal issues (technical, procedural and substantive ) that have been raised. But again, this is the stuff of a normal democracy. Our disputes are being dealt with by the courts. Of course there will always be those with a political interest who would want to see and aver serious instability. President Kgalema Motlanthe’ first words and actions have been reassuring . Indeed he has gone further and directly responded to some major issues such as crime and hiv-aids. In my view most importantly he has opened space for debate and action on some fundamental issues of national identity and respect, which space some would argue had in the not so distant past become severely and even dangerously restricted. I am sure that all South Africans wish President Motlanthe well in fulfilling the mandate that he has been given.

Fever Newsby Johan Pretorius03 October 2008

Cwele said that his appointment to the intelligence portfolio had come as a surprise. Posted by Tango at 8:52 AM 0 comments Links to this post Labels: The spy Rape Crisis centre faces closure although demand for services is increasing.

Desperate Rape Crisis centre faces closure6 October 2008, 14:33

Related articles

Child grants used for booze --By Ella Smook

Rape Crisis, a non-governmental organisation which has helped survivors of rape and sexual violence in Cape Town since 1976, warned on Sunday it was facing a "very serious" financial crisis which could force it to close its doors.

"In the last two years, two core funders ended their relationship with Rape Crisis, one of them leaving the country and the other feeling it was time to move on after 10 years of support.

"A number of international funders have also ended their trade agreements and have moved out of the country, while local (South African) funders choose to move into impoverished communities and not the Western Cape, which is seen as having more resources," Rape Crisis director Chantel Cooper told the Cape Argus.

While the National Lottery Board has also not supported the organisation since 2006, expenses have soared and currently stand at R300 000 a month.

Transport, which is provided to all victims, was one of the biggest factors contributing to the rise in expenses, while other costs included the volunteer stipend, salaries, rental, phone bills, electricity and water.

"We are just not able to make ends meet," Cooper said.

"The demand for our services is increasing, but we are not able to meet the demand because of a lack of resources."

Rape Crisis provides four core services aimed at prevention of violence against women, providing counselling and support to victims, lobbying and advocacy, and volunteer recruitment and development.

The organisation has three area offices in Observatory, Khayelitsha and Athlone, a 24-hour counselling hotline, and a 24-hour trauma centre at the GF Jooste Hospital where police take rape survivors for counselling and medical attention.

Rape Crisis also runs support services at four courts - Wynberg, Khayelitsha, Parow and Cape Town magistrate's courts - providing support throughout the secondary trauma experienced during the court process.

It operates with 13 fulltime staff, up to 10 court supporters, eight counsellors at the hospital and about 40 volunteers.

Cooper said: "If we had core funding it would be much easier, but our core funding used to come in euros, pounds and dollars once we lost that, we had to cut back on a lot of the services we provided."

She said Rape Crisis offered a crucial service not only to survivors of rape and sexual violence but also to entire communities where there are prevention programmes aimed at creating safer environments for women.

"The need for our services has grown, and yet the expenses often exceed what we would like to offer," said Cooper, adding that apart from financial support, donations of time, skill and expertise were also urgently needed.

This article was originally published on page 6 of The Cape Argus on October 06, 2008

Related article:

Rape Crisis - our experienceEstablished in 1976, RCCTT (Rape Crisis Cape Town Trust) is one of the oldest and most experienced organisations working within the sphere of violence against women. Member activists have actively addressed the challenges of improving the access to care, treatment and justice for rape survivors, and they have recently gained significant support from government to implement reform policies that will aid survivors. These initiatives include:

the successful lobbying for a change in the sexual offences legislation, the setting up of specialised sexual offences courts, the setting up of victim support centers at police stations, and creating dedicated medical facilities linked to creating an effective and efficient service for rape survivors. provision of counselling and support services to a number of survivors and their partners, family and friends. successful implementation of awareness interventions in schools and communities. continuous empowerment of women from surrounding communities through the Rape Crisis volunteer programme. recognition of skills and expertise on the issue of rape and violence against women by partners and other sectors in South Africa. RCCTT continues to provide counselling and support to thousands of rape survivors and their family and friends, and continues to communicate with communities, organisations and government on creating and maintaining awareness around rape.

How is RCTT unique?RCCTT is one of the most experienced organisations in dealing with violence against women, and specialises in dealing with rape. Our experience and specialised skills in this field are well recognized, as can be seen by the number of requests we receive to deliver presentations at conferences, seminars and workshops. RCCTT strives to achieve its aims and objectives through an integrated community development approach, and we are confident that we will continue to make positive changes to create a safer environment for women and children, in the communities that we serve, and Western Cape as a whole. We are also confident that the services we offer are a step ahead of other organisations, such as:

Support groups for rape survivors Special support for survivors who want to share their experiences with the public Aromatherapy treatments for rape survivors Pre-Trial Consultation advice to rape survivors 24-hour Counseling and support to partners, family and friends of survivors Assisting small organisations with the development of submissions to various legislations under committee discussions Constructive relationships with key role players within the criminal justice system Working in partnership with the Mabuphele Campaign and the Saartjie Baartman Centre Strong networking partnerships with networks, ngo’s and community based organisations Committed and passionate volunteers who are active within their community structures Our philosophyRape Crisis believe that men and women need to take collective responsibility to curb violence against women and it is through this partnership that real change will take place in our society.

We maintain a feminist understanding of how violence against women is produced and perpetuated and as to what the effects are. We believe that rape is one form of gender based violence that is produced in part by the social attitudes that we carry toward the relationships between men and women.

We believe that there must be a change in the behaviour of men in their treatment of women in their personal and social relationships as well as in what they perceive the role of women to be in society bin general.

Similarly, we believe that there must be a change in the behaviour of women, in the way that they protect themselves and insist on their rights in their personal and social relationships with men.

For these reasons, our public education projects focus on sharing information about rape and on challenging those social attitudes that we believe contribute towards the perpetuation of sexual violence in our society.

Rape Crisis counseling is based on a feminist approach which asserts every woman’s right to be an active participant in her own healing, where she makes her own decisions and her strengths rather than her inadequacies are the main focus of attention. Expressing the feelings associated with rape can only happen in an environment of support rather than blame and in a situation where there is a sense of equality. She exercises the choices that lead her towards her own growth and change and a greater sense of her empowerment.

The same is equally true of the men who are counseled at Rape Crisis.

How we functionRape Crisis Cape Town was registered as a Trust in February 1999. The various forms within the organisation are as follows:

Management StructureBoard of TrusteesThe Board fulfils the external management functions of the organisation. It comprises 7 elected and 3 ex-officio members (the Director, a Staff Representative and a Volunteer Representative), and is responsible for holding the ethos of the organisation in trust, giving it direction, deciding how it will be managed (rules of meetings and decision making, and policy development, etc.), overseeing the management of resources, acting as a court of appeal in disputes which internal management cannot resolve, and taking final legal and financial responsibility for the organisation. The Board meets quarterly. From among its own membership, the Board elects the office bearers, i.e. Chairperson, Vice-Chair and Treasurer.

Joint Strategy MeetingsAll Project Coordinators, the Financial Manager and the Director form the Joint Strategy team and meet once a month to discuss projects. This team uses this space to discuss and formulate strategies that will assist in achieving the vision and mission of the organisation.

Staff MeetingsAll staff meets on a monthly basis to discuss issues pertinent to staff and the organisation.

Focus Group MeetingsThese forums involve the volunteers active within a particular focus group and the staff member who heads up that focus group. Thus the Observatory Counselling Group, and the Training & Public Awareness Group have their own monthly meeting, as do the Heideveld Training & Public Awareness Group, and Khayelitsha Counselling and Training & Public Awareness Groups. The Focus Group meetings make practical decisions about the ways in which they will function. They are forums where volunteers make inputs into policy development, evaluation of our work, and proposals about new positions, new policies etc. Focus Group meetings are also places of support and supervision for volunteers, and they identify areas where ongoing training and specialised inputs are required to sustain and improve our services. Where appropriate, joint Focus Group meetings are arranged across areas of work and across offices to build relationships within the organisation as a whole.

Volunteer ForumThis is a new forum within Rape Crisis Cape Town, and its role is being defined, although in some ways it fulfils the functions of the old General Meeting. It is envisaged that it will be a place where all volunteers across the organisation can meet to discuss issues of common concern, and to ensure that these are reflected at Board level via the Volunteer Representative. The Volunteer Forum is also a social opportunity and supper is served at the conclusion of these meetings. The Volunteer Forum meets every three months (March, June, September and December).

Annual General MeetingThe AGM is held each year, within six months of the end of our financial year. This means that we usually hold it before the end of September. The purpose of the AGM is to report to friends and the public at large on our work and especially on how we have spent our budget during the previous twelve months. The AGM is also usually the place where we formally appoint our auditors. The appointment of new Board members is also done at the AGM, as well as confirming the members of the Board.

Should a position on the Board become vacant for whatever reason, nominations for a new Board member would be called for from the organisation as a whole. This requires that members of the organisation both propose and motivate for new Board members, and at least two RCCT members have to nominate and second prospective new Board members. The remaining members of the Board then elect the new member from the nominations.

Decision makingDepending on the issue, the process of decision making would involve discussions at volunteer level at Focus Group meetings or Volunteer Forum and then either Staff or JSM level, depending on whether it is related to the organisation or a project. After consultation with both the volunteers and the staff, decisions could be made at staff or JSM level and some referred to the Board for ratification, depending on the matter.

The process is not as cumbersome as it might seem, and it ensures that Rape Crisis Cape Town has entrenched in it’s decision making as wide and democratic a representation as is possible. With the added value of communication technology, we have attempted to retain as far as is practical our commitment to being a democratic organisation.

Feminist counsellingThe work of counselling involoves creating a space in which someone can find her way back into her life. Given that women often experience ourselves as powerless or “stuck”, counselling involves a primary commitment to validating a woman’s right to her feelings, decisions, and intelligence.

Abuse makes everyone feel inferior and disrespected. It is all too easy for these feelings to complement low self-esteem or dependency many women already experience through their relations to men (and other women!) at work and in their families.

Women’s immense strength, courage, intelligence, and strategic know-how very rarely get valued in systematic ways. In counseling, the value given to a woman’s own self (her particular way of thinking, being, and feeling) can reveal for her - and the listener - the inner resources she posseses. It is these resources which can empower her into recovery from what she has experienced - a recovery which is about regaining the “self” sexual violence attempted to destroy.

In that the work of counselling assumes women’s right to self-definition and to control over our own lives, it is feminist.

It is also feminist in its commitment to complete social equality, and in its recognition of the need to learn everything possible about the way both privilege and discrimination have distorted and shaped out ideas and lives. Posted by Tango at 3:08 AM 0 comments Links to this post Labels: Rape crisis centre Monday, October 6, 2008Free State ANC slams Lekota's 'embarrassing' actions

BLOEMFONTEIN, SOUTH AFRICA Oct 06 2008 14:42

Former African National Congress (ANC) national chairperson Mosiuoa Lekota, who mounted an attack on party leaders in a recent open letter, is a confused and power-hungry individual, the ANC in the Free State said on Monday.

"For some strange reason [he] believes that the ANC is his personal heritage," Free State ANC spokesperson Teboho Sikisi said in a statement issued by the party's provincial executive committee (PEC).

"We have no other option but to state that his actions are rather an embarrassment to the ANC in this province."

In a strongly worded recent statement to ANC secretary general Gwede Mantashe, Lekota said the current leadership within the ANC had taken a "direct and unadulterated departure" from the Freedom Charter.

Lekota, a former Free State premier, also raised his concerns over what he called "high levels of intolerance in the ANC".

Sikisi said Lekota must humble himself and become a unifier whom the ANC could be proud of.

The PEC also expressed its shock at the "unprovoked attack" by Lekota on the party.

"As a result we have opted to take an unusual step to respond to this irresponsible and outright subjective attack on our movement by comrade Terror Lekota."

Sikisi said the ANC wanted the general populace and the "many comrades" for whom Lekota purported to speak to look at some facts before judging the party.

He said the first instances of the ANC being taken to court after becoming the ruling party in South Africa occurred in the Free State.

Sikisi said that in the recent past in the Free State when the ANC had been taken to court, it was done by people who were known to be close to Lekota.

"The majority of these court applications took place when comrade Terror Lekota was still the chairperson of the ANC."

Just before the Polokwane conference, Lekota hastily convened the ANC provincial leadership to a meeting in Kroonstad where, "true to his character, he tried unsuccessfully" to bully the leadership into agreeing to terms with the leadership of the court applicants.

"We would not be surprised if he is part of the so-called initiative to start an ostensibly new party to oppose the ANC."

The party in the Free State would stay vigilant regardless of Lekota's negative perceptions, Sikisi said.

Sapa.

Comments by Sonny

Stand up and be counted; Don't submit to thuggery....

Freedom of association.... If you don't like the people, then bail out. Posted by Sonny Cox at 8:40 PM 0 comments Links to this post Labels: ANC Intimidation. Formation

Aerial ballet The Surya Kiren aerobatics team run through their routine on Monday ahead of Indian Air Force Day in Hindon, Ghaziabad, on Wednesday. (Prakash Singh, AFP) Posted by Sonny Cox at 8:38 PM 0 comments Links to this post Rand weakest since 2003 R8.90/$-Wall Street is the main factor driving th rand

Rand weakest since 2003Oct 6 2008 4:39PMJohannesburg - The rand extended session losses to 5 percent against the dollar on Monday, with investors continuing to drop riskier assets after US stocks opened sharply lower. The local currency was trading at R8.90/$ at 16:06, about 5% softer than its previous close in New York, and its weakest level since January 2003.

The currency was hit by falling equities and rising risk aversion as fears of a global recession in 2009 escalate.

The US rescue package, which was passed by regulators on Friday night, has failed to calm jittery global markets, with stocks and emerging market currencies coming under pressure on Monday.

The main factor driving the rand is not the local political transition, but Wall Street, says director and chief economist of Econometrix Dr Azar Jammine.

"The rand is going up and down depending on what happens on Wall Street. It is quite uncanny to see how the rand follows the Dow Jones," he says.

Jammine explains why this is so: "The rand is the primary vehicle through which international investors express their risk aversion to emerging markets. For example, when they are pessimistic, they sell the rand."

"The EM underperformance trends remain intact and the technical setup continues to deteriorate. Our focus has been on $ZAR and $TRY, as a number of key resistance levels have been broken, or being tested. For $ZAR, the upside bias remains intact particularly with the break through the key R8.50 area and now suggests a closer test of the R8.80/R9.10 area is now likely.

Pullbacks will now find support at R8.60/8.57," JP Morgan said in their daily FX Techs note.

Dow Jones Newswires reports that buying of safe-haven currencies - the dollar and yen - intensified Monday as several banks revised forecasts for a global recession in 2009.

Investors and financial institutions across the world are reversing positions out of the euro and emerging market currencies that had been financed by shorting the US dollar. The move is encouraged by an increasingly dire outlook for the global economy. Goldman Sachs has made significant changes to its US and UK forecasts; and UBS now projects a global recession in 2009.

"(We) think the money market tension, the scarcity of dollar funding globally and the deleveraging that it induces has been key to the recent dollar gains. From this perspective, the lack of relief from the (government rescue package) approval on Friday could mean that recent trading patterns may extend further," said Jens Nordvig, a currency strategist at Goldman Sachs in New York.

Latest ArticlesFAIS OmbudsmanOmbud urges probe into government payment system for insurance premiums in wake of fraud findingFAIS Ombud Ruling: Locked garage is not the same as chains, ostriches and dogsFAIS Ombud: Complaint against broker is dismissed

FAIS Ombud Ruling: Complaint against broker dismissed on probabilitiesFAIS Ombud denies leave to appealFAIS Ombud turns down two applications for leave to appealFewer complaints reach the Ombudsman for Long-Term Insurance

If the latest determination by the FAIS Ombud doesn’t inspire the country’s life assurance companies to clean up shop then nothing will. FAIS Ombud Charles Pillai’s findings allude to massive instances of policy fraud, abuse of the government payments system (PERSAL) and a general reluctance in the industry to act quickly when allegations of abuse are brought to its attention.

Although we’ll share some details of the case in question, we’re more concerned with the Ombudsman’s finding that this event was not isolated. In 2006 the industry watchdog received a number of complaints about “unauthorised policies” including 33 against African Life, 48 against Channel Life, 20 against Liberty Life and 19 against Metropolitan Life. The Ombudsman believes these complaints generally arise from abuses of insurance company systems by unscrupulous agents. And when these irregularities are brought to the insurance companies’ attention, they “merely refund the premiums which were debited without authority.” It’s clear that much more has to be done to stamp out the illegal practices which give rise to these abuses. A good start would be for the insurers to adopt a ‘prevention rather than cure’ outlook.

The birth of an illegal insurance policy

The claimant’s affidavit in this determination is telling. Mrs Nonhlanhla Khawula, a widow and sole breadwinner to two teenage sons, states: “I have been paying for the policy I did not buy. I did not know the people covered. I didn’t find a letter or policy document for the policy I was paying for. I ended up cancelling it after 11 months of paying. I would like to get the money I paid (refund) for the policy I didn’t buy.” Respondents in the case included African Life Insurance, now trading as Sanlam Sky Solutions (First Respondent), Timir Financial Services t/a Southern Investment Corporation (Second Respondent) and Leonard Mqadi, a representative of the second respondent (Third Respondent).

Khawula purchased two policies from the Third Respondent after attending a meeting at her school in November 2004. The purchased policies included a burial plan for R93.50 per month and a retirement annuity for R156.00 per month. Both policies were sold with annual increases of 10% and would start on 1 February 2005. Everything went to plan in February, March and April of that year; but in May the claimant noticed an additional deduction in the amount of R198.50, also in favour of African Life.

After paying a visit to the African Life regional office Khawula learned that “a life policy with the principal life assured as ‘Mr and Mrs Khuzwayo’ and the beneficiary as one ‘Leonard Mqadi’” had been issued. Despite a number of further visits the claimant wasn’t able to get the policy premiums stopped, nor was she able to obtain a copy of the policy document. It was only after the claimant approached Legal Wise to intervene on her behalf that the monthly premium was stopped (in March 2006) and only after a complaint was lodged with the Ombudsman (in January 2007) that the paid premiums were refunded. A total of R1, 985.00 had been deducted over a ten month period from 1 May 2005.

Make sure the perpetrators are punished

Although her premiums had been refunded the claimant requested a further investigation. According to the Ombudsman Khawula’s request was “an exception to the normal manner in which victims of this type of conduct react.” Typically victims of this type of fraud left matters once their premium was refunded. Further investigation revealed that the Third Respondent was no longer in the employ of Timir Financial Services. He was, however, tracked down and asked to provide a sworn affidavit. In this affidavit Mqadi stated that he had sold two legal policies to the claimant. He made no mention of a third policy. The FAIS Ombud was not overly impressed by the contents of the affidavit.

Apart from ruling that the First Respondent compensate the claimant for interest on the amount of premiums taken, the Ombudsman also ordered that R350 be paid to the claimant (by the Second and Third Respondents) to compensate her for travelling expenses. But we’re more interested in the far reaching recommendations made regards government’s payment system (PERSAL) and the administration systems of insurance companies in general.

Missing application forms a concern

The Ombudsman was amazed that none of the respondents were able to produce a copy of the application form for the fraudulent proposal. “This is unacceptable as an application or proposal signed by a client goes to the root of the formation of a contract of insurance!” The Ombudsman wanted to know how a payment instruction could have been loaded without any consent from the client. In this regard the Ombudsman “recommends that all insurance companies establish a system whereby all necessary documentation is checked before a policy number is issued. There should also be a system whereby policy holders are informed of premium deductions from salaries and bank accounts. For example a simple message to the complainant in this matter would have alerted her to the unauthorized policy.” Surely this is already in place? Questions were also asked about the insurance company’s willingness to come to the claimant’s assistance when the fraud was first brought to its attention.

He also suggests “government should advise all their employees to scrutinize very carefully their pay slips or salary advices. In particular employees must be able to find an explanation for every deduction from their salary, irrespective of the amount involved. In this way employees will be able to prevent becoming victims of this fraudulent practice;

Editor’s thoughts: It’s clear we still have a long way to go before all instances of fraud are stamped out. Are the life insurance companies doing enough to prevent fraudulent policies? Add your comments below, or send them to gareth@fanews.co.za